* Dollar dips vs major currencies, yen
* SPDR Gold holdings down 0.8 percent on Monday
* Oil extends rise after renewed US sanctions on Iran kick
in
(Recasts, adds comments, updates prices)
By Apeksha Nair
BENGALURU, Aug 7 (Reuters) - Gold prices climbed on Tuesday,
supported by a weaker U.S. dollar and buying after a recent
price slump.
Spot gold was up 0.4 percent at $1,210.99 an ounce at
0814 GMT, after earlier hitting $1,213.81.
U.S. gold futures were flat at $1,217.6 an ounce.
"The slightly improved sentiment for gold has most likely
been encouraged by some weakness in the dollar," said Jameel
Ahmad, head of global currency and market research at FXTM.
Gold prices, which have declined nearly 12 percent since
mid-April mainly due to a strong dollar, have largely failed to
benefit from recent political uncertainty surrounding markets,
as tensions directed safe-haven flows into the dollar, investors
said.
The U.S. dollar, in which gold is priced, dipped against
major peers on Tuesday, but expectations for further interest
rate hikes in the United States limited downside for the
greenback and capped gains in gold.
Meanwhile, holdings in SPDR Gold Trust , the world's
largest gold-backed exchange-traded fund, fell 0.78 percent to
788.71 tonnes on Monday.
"The overall sentiment remains weak in light of ETF reducing
positions, strong dollar and rate hikes," said Helen Lau,
analyst at Argonaut Securities.
Asian shares ticked higher on Tuesday, lifted by a rebound
in battered Chinese stock markets, but investors remained
cautious on developments on the U.S.-China trade war front and
impact from the first set of U.S. sanctions on Iran.
The Trump administration will aggressively enforce economic
sanctions that it is re-imposing on Iran this week and expects
the measures to have a significant impact on the Iranian
economy, senior U.S. administration officials said on Monday.
Those sanctions include precious metals, U.S. bank notes,
steel and coal.
"We believe a reversal in gold prices is in the offing, as
speculation of a trade war and Iranian sanctions are turning
into reality. Further, record short investors positions in gold
strengthens our conviction of a price recovery in H2," ANZ
analysts said in a note.
U.S. data from last week showed investors added 13,931
contracts to their net short position in the week to July 31,
bringing it to 41,087 contracts, the biggest since records
became publicly available in 2006.
In other precious metals, silver rose 0.9 percent to
$15.39 an ounce. Platinum gained 0.9 percent to $828.49
per ounce, while palladium was 0.7 percent higher at $910
an ounce.
(Reporting by Apeksha Nair in Bengaluru
Editing by Amrutha Gayathri and Subhranshu Sahu)